Man accused of COVID-19 relief fraud
DOJ: Resident netted nearly $900K
A Commerce Township man is facing a federal charge of wire fraud for allegedly cheating a COVID-19 business loan program out of nearly $900,000.
According to a news release from the Department of Justice, Ryan Carruthers, 42, is accused of applying for 14 loans in the names of fictitious businesses from lenders participating in the Paycheck Protection Program in 2020 and 2021. The PPP was overseen by the Small Business Administration where participating banks and other lending institutions provided loans to help keep workers employed during the COVID-19 pandemic.
The program called for the SBA to forgive the loans if all employees were kept on the payroll for eight weeks and the money from the loans was used for payroll, mortgage interest, rent or utility bills.
Carruthers also allegedly applied for another loan from the Economic Injury Disaster Loan Program, in which the SBA provided direct loans to businesses adversely affected by the pandemic.
Along with allegations that Carruthers’ businesses were fictitious, it’s alleged that the applications he submitted for the loans were fraudulent.
The business’ names included “Cobra Kai Karate” and “Pure Juice Bar & Café,” allegedly with workforces of three to 15 employees. According to the federal complaint, there’s no evidence any of the businesses had employees, and many of them weren’t incorporated until after March 2020 — past the eligibility date for PPP loans.
Of the loans Carruthers is accused of applying for, 13 were funded and resulted in disbursements of approximately $851,000. It’s alleged that Carruthers used the proceeds to pay off his home mortgage of approximately $251,000 and to buy a personal watercraft as well as other items.
An investigation continues into the case, and once it’s completed a decision will be made on whether or not a federal indictment will be sought. An indictment is needed for a trial.
Carruthers faces up to twenty years in prison if convicted of wire fraud.